Plato on Prediction Markets

For over two millennia, Plato’s Allegory of the Cave has challenged us to question whether what we see is truly real or merely shadows on a wall. In the 1999 film The Matrix, this ancient insight is reborn in a digital age: humans live plugged into a simulated world while the truth waits beyond the illusion. Both stories ask the same fundamental question, what if your perceived reality is just a sophisticated shadow play, and discovery requires courage to step into the light.

Those of us in the crypto community will recognize this secular religion of sorts; Bitcoin and crypto are stepping into the light, a decentralized future, digital gold, non state controlled value, the internet of money, et al. And for a lot of us, this continues to be the case, despite wild swings in price and a recent pullback. Once you’ve unplugged from the Matrix, if you’re a true believer, you’re in it for, as my father says, ‘missionary not mercenary reasons.’

I came face to face with the Matrix being activated last week, after a LinkedIn post of mine on Prediction Markets was received, shall we say, with resistance and a sigh, by the legacy sportsbook community. Remember, no resistance often means no reach. Haters are evidence your work matters.

I’m not saying I’m right and they’re wrong. These are nuanced topics, and when you read the post you’ll understand that. I’m merely saying that this is new. (ok, I’m saying they’re wrong)

Most legacy sportsbook and betting exchange folks will disagree with this. (candidly the exchanges like Betfair Exchange, are very similar to how PMs work) The point is that even things that look, act, and feel similar and not necessarily the same, and in fact, may exist in very different realities. Again, for me, Prediction Markets are new not only for the 4 points I brought up in my post, but also via a recent paper written by the US Federal Reserve. The first line of the paper as follows:

“Prediction markets offer a new market-based approach to measuring macroeconomic expectations in real-time”

Full paper available here.

In fact, the paper indicates that CFTC regulated Kalshi, is a strong forecasting tool. Also new. (Foreshadowing, Prediction Markets are insurance)

In addition, new CFTC chairman Michael Selig wrote a fiercely supportive WSJ opinion piece on encroaching US States. He sees these as new federally regulated event markets.

“The Commodity Futures Trading Commission for decades has overseen regulation of prediction markets—or event contracts, as we refer to them—that help market participants hedge risk, aggregate information and test hypotheses about future outcomes.

In recent years, states have waged legal attacks on the CFTC’s authority to regulate these financial instruments. If they succeed, participants would be barred from access to federally regulated event-contract markets. So it should come as no surprise that the commission is filing a friend-of-the-court brief Tuesday supporting Crypto.com in the Ninth U.S. Circuit Court of Appeals”.

So, for me, Prediction Markets are new, and I’m guessing a whole generation of users agree with me.

And, in case you’re wondering if I practice what I preach, the answer is yes. I continue to run prop capital on PMs like NoVig, Kalshi and Polymarket US.

Recent Travel

Jan 26-31, St. Lucia/Costa Rica: a friend of mine runs a Multi Family Office (MFO) and I had the opportunity to join a trip to St. Lucia and Costa Rica to visit properties. What felt like capital camp at points, was an incredible group of entrepreneurs with major exits, taste makers, asset managers, and former pro athletes. My thesis of athletes and alternative assets being great bedfellows, continues to play out.

Note: I was the Crypto/AI/Prediction Markets guy.

Feb 3-6, San Francisco: Super Bowl week but for the side events and leave on Friday?! You had me at avoiding crowds. There’s nothing more joyful than spending an awesome week in great meetings and then flying home on Friday while the throngs of humanity arrive to where you just were. Your couch awaits.

The big news was getting great feedback on the NIL Insurance Solution that I’m building with a family office. We’re modernizing risk in college athletics to align incentives across the ecosystem for athletes, healthcare professionals, agents, underwriters & reinsurers, universities & collective.

Upcoming Travel

March 17-23, Riyadh, Saudi Arabia : My next Athletes & Alternative Assets event is in Saudi Arabia. This time during the Fanatics Flag Football Classic, marking Tom Brady’s return to the field.

March 24-27, Miami: FII Miami calls, I will answer.

"Modern man, for Baudelaire, is not the man who goes off to discover himself, his secrets and his hidden truth; he is the man who tries to invent himself. This modernity does not 'liberate man in his own being'; it compels him to face the task of producing himself." - Foucault